Five-year court battle bankrupts former City IT manager

A former City IT manager has been declared bankrupt with debts of £2.6m following a five-year legal battle over claims that fraud allegations and a defamatory job reference ruined his health and career.

Michael Johnson's problems started in 1999 when he was working for IT services company Perot Systems on a contract at investment bank UBS Warburg on a salary of £60,000 per year.

Johnson claims he lost his job at Perot Systems after the Abbey bank told his employer he had fraudulently applied for a bank account using a false address history and issued a fraud alert on him to other financial services institutions through the Cifas fraud prevention and monitoring service.

The Cifas fraud warning against Johnson, which had prevented him getting another IT job in the banking industry, was retracted in 2000 but his claim for compensation from Abbey was thrown out by the High Court in 2004.

Johnson finally got a job at Deutsche Bank at the end of 2000 but was dismissed less than a year later following an employment reference from his previous employer Perot Systems.

Johnson then started a £10m legal battle against Perot Systems, claiming one of its employees had provided a defamatory reference accusing him of being a fraudster to a staff screening company used by Deutsche Bank to vet its workers.

That claim against Perot Systems has since been struck out by the High Court but is currently being considered by the House of Lords Appeal Committee.

Johnson has not worked at all between October 2001 and November 2005 and the stress and health problems caused by the legal battle have left him permanently classed as disabled.

He said: "I will never be the same again."

But Johnson told silicon.com he will fight on to clear his reputation and said he is currently awaiting clearance from the insolvency service to continue his legal battle after providing evidence that his relatives will assume full responsibility for costs relating to the claims for compensation.